SUPPLY AND DISTRIBUTION AGREEMENT

 

 

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Confidential Treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request.  Omissions are designated as “*”. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission

 

(1)

GENTA INCORPORATED

 

(2)

IDIS LIMITED

 

 

 

 

 

SUPPLY AND DISTRIBUTION AGREEMENT

 

 

 

 

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DATE

March 6, 2007

 

PARTIES

 

(1)

 GENTA INCORPORATED, a company incorporated in the State of Delaware, United States of America, whose registered office is at 200 Connell Drive, Berkeley Heights, NJ  07922 USA

 

( “GENTA” )

 

(2)

IDIS LIMITED , a company incorporated in England (registered number 2143039), whose registered office is at IDIS House, Churchfield Road, Weybridge, Surrey, KT13 8DB, United Kingdom

 

( “IDIS" )  

 

 

INTRODUCTION

 

A)

GENTA wishes to supply the Products in the Territory through an entity with experience in the distribution of unlicensed products on a Named Patient Supply basis.

 

B)

IDIS has capability in the distribution of unlicensed products on a Named Patient Supply basis , within each country in the Territory and wishes to act as GENTA’s distributor of the Products in the Territory.

 

C)

GENTA appoints IDIS as its Exclusive distributor of the Products in the Territory on a Named Patient Supply basis on the terms set out in this Agreement.

 

 

OPERATIVE PROVISIONS

 

1.

Definitions and interpretation

In this Agreement the following words have the following meanings:

“Business Day” means any day other than a Saturday or Sunday or a public or bank holiday in England or USA;

“Commencement Date” means the date of signature of this Agreement by both parties;

“Confidential Agreements” means any and all confidential agreements entered into between the parties either before or after the Commencement Date relating to the subject matter of this Agreement; “Confidential Information” means all information which is commercially sensitive or of a secret nature, or information which is marked confidential, or which is orally stated to be confidential and confirmed in writing as confidential within thirty (30) days thereafter, relating to any and all aspects of the business of either party, including any confidential information set out in Confidentiality Agreements;

“Contract” has the meaning set out in clause 7.2 ;

“Exclusive” means a right granted under this Agreement which GENTA will not itself exercise and will not authorise any other person to exercise;

 

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“Fax Address” means the fax address of the relevant party given in Schedule 4 ;

“Field” means the distribution of unlicensed products on a Named Patient Supply basis.

“FOC Product” means Product distributed by IDIS to the customer without charge except for shipping costs, in accordance with clause 5 .  

“Force Majeure” means any circumstances beyond the reasonable control of the relevant party (including, without limitation, any strike, lock-out or other form of industrial action, acts of God, war or national emergency, an act of terrorism, riot, civil commotion, malicious damage, compliance with any law or government order, rule, regulation or direction, accident, fire, flood or storm) which prevents that party from complying with any or all of its obligations under this Agreement;

“Indication” means the symptoms, condition, or disease for which the Product has been prescribed for a particular Named Patient;

 

“Intellectual Property Rights” means all intellectual and industrial property rights including patents, know-how, registered trade marks, registered designs, utility models, applications for and rights to apply for any of the foregoing, unregistered design rights, unregistered trade marks, rights to prevent passing off for unfair competition and copyright, database rights, topography rights and any other rights in any invention, discovery or process, in each case in the United Kingdom and all other countries in the world and together with all renewals and extensions;

“Marketing Authorisation” means an authorisation for the sale and placing on the market or marketing of a Product within the Territory;

“Named Patient” means the patient for whom the Product(s) have been prescribed;

“Named Patient Supply” means the supply of Products which do not have a Marketing Authorisation for the indication in the country of destination and are supplied to meet the special needs of a specific patient or patients under the order of a medical practitioner or other person lawfully permitted to prescribe such Products to a specific patient or patients in the Territory or relevant part of it in accordance with all laws and regulatory requirements as they apply to such supply;

“Orders” has the meaning set out in clause 7.1 ;

"Prices" means the IDIS Buy Price, net of the IDIS Fee/Pack, to be paid by IDIS to GENTA for the Products as set out in Schedule 1 of this Agreement, or as varied in accordance with clause 6.1 ;

"Products" means the product or products listed in Schedule 1 and additionally any further products of GENTA offered to be supplied to IDIS by GENTA in writing from to time to time after the Commencement Date and accepted in writing by IDIS;

"Service Address" means the address for service of the relevant party given in Schedule 4 of this Agreement;

 

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“Technical Agreement” means the Technical Agreement for Distribution Services separately executed by the parties in connection with this Agreement;

“Term” means a period of   * years.

"Territory" means those countries set out in Schedule 2 of this Agreement and additionally any further countries agreed between the parties in writing from time to time after the Commencement Date;

"Trade Marks" means the trade marks and trade names of GENTA listed in Schedule 3 and such other trade marks as GENTA notifies to IDIS in writing from time to time after the Commencement Date;

"Year" means the period of 12 months beginning on the Commencement Date and each subsequent period of 12 months commencing on the anniversary of the Commencement Date during the continuance of this Agreement.

1.1.

Headings to the clauses of and Schedules to this Agreement are for convenience only and shall not affect its construction or interpretation.

1.2.

References to clauses and Schedules are to the clauses of and Schedules of this Agreement.

1.3.

The Schedules are deemed to be incorporated and form part of this Agreement and the term "Agreement" shall be construed accordingly.  In the event of conflict between any of the terms of this main part of the Agreement and the Schedules, the former shall prevail.

1.4.

The word “indemnify” in this Agreement will mean to indemnify, keep indemnified and hold harmless the indemnified party from and against all third party costs (including the cost of enforcement), expenses, liabilities (including any tax liability), injuries, damages, claims, demands, proceedings or legal costs (on a full indemnity basis) and judgements which the indemnified party incurs or suffers and “indemnity”, “indemnities” and “indemnifies” have a corresponding meaning.

1.5.

Any reference to a “month” is a reference to the period of a calendar month.

1.6.

Any reference to “person” means a natural or legal person, firm or unincorporated association.

1.7.

Words importing the singular include the plural and vice versa.

2.

Appointment and Restrictions

2.1

Subject to the terms and conditions of this Agreement, GENTA hereby grants to IDIS the Exclusive right within the Field to distribute on its own account the Products in the Territory and IDIS agrees to act in this capacity subject to the terms of this Agreement.

2.2

During the continuance of this Agreement, GENTA undertakes not to market or sell the Products within the Field directly or indirectly to any other person in the Territory without first obtaining IDIS’s express written consent (such consent not to be unreasonably withheld or delayed).

2.3

During the continuance of this Agreement, IDIS undertakes not to seek customers or promote sales of the Products outside the Territory, and in any event shall not sell or distribute any Product within the United States.

 

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2.4

IDIS undertakes that it shall not unless otherwise approved in writing by GENTA during the continuance of this Agreement:

2.4.1

Knowingly manufacture, sell or distribute any goods that compete with the Products in the Territory;

2.4.2

obtain its supplies of the Products for distribution within the Territory other than from GENTA; provided that GENTA is able and willing to supply the same on the terms of this Agreement.

2.5

IDIS undertakes that while the currently pending MAA for GENASENSE is pending and under review by the EMEA, with respect to GENASENSE in any EU member state it shall not:

 

2.5.1

commence any regulatory action;

 

2.5.2

communicate with any regulatory authority;

 

2.5.3

distribute or cause distribution either for sale or as FOC Product;

 

without the express prior written consent of GENTA to any of the foregoing activities, which consent may be withheld in GENTA’s sole discretion.  In giving any such consent GENTA may, in its sole discretion, impose restrictions and/or limitations on the permitted activities, and IDIS shall comply in all respects with such restrictions and/or limitations.

 

3.

Term

3.1

This Agreement shall commence on the Commencement Date and subject to early termination in accordance with its terms shall continue in force in respect of each Product in each country of the Territory until * , at which time the Agreement shall terminate with respect to such Product in such country.

3.2

Following the Term, this Agreement shall be renewed automatically for additional, successive * periods unless and until this Agreement is earlier terminated as provided for herein or upon * days written notice by either party prior to the expiration of the then current Term, in which case this Agreement shall terminate at the end of the then-current Term.  

4.

Supply of the Products

4.1.

GENTA shall supply the Products to IDIS on a consignment basis in accordance with the terms and conditions of this Agreement to the exclusion of any terms and conditions of sale submitted at any time by either party and whether printed or sent with any order form, delivery note, invoice or otherwise.  GENTA shall be responsible for insuring the Products while in transit to IDIS. IDIS shall be responsible for adequately insuring the Products upon receipt thereof. For clarity, title or ownership of the Products shall not pass to IDIS but shall pass directly to the consumer. IDIS shall indicate to any third parties that its inventory of Product is owned by GENTA.

4.2.

GENTA shall not supply IDIS with any Products with a remaining shelf life of less than * months, and GENTA shall replace any Product supplied to IDIS that expires prior to distribution.  IDIS will have no obligation to pay the IDIS Buy Price for any such expired Product.  If GENTA is unable to comply with this clause 4.2 it shall notify IDIS immediately providing details of the remaining unexpired shelf lives of the available Products and, in such event, GENTA shall not proceed with the Order until it has received written confirmation from IDIS that the Order may proceed at which time the Contract shall be formed.

 

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5.

Distribution of FOC Product  

5.1

GENTA or IDIS may, from time to time, receive requests from within the Territory for FOC Product.  Within 1-2 workings days of receipt of such request, IDIS shall forward the request to GENTA to the attention of its Drug Safety and Surveillance Department, including all information relevant to GENTA’s decision whether or not to approve the request.  IDIS shall not distribute Product to the requestor until such time as it has received written approval from GENTA, including any restrictions or limitations GENTA deems necessary or advisable.  

 

5.2

GENTA shall review any requests for FOC Product it receives directly and, if approved, shall advise IDIS in writing within 1-2 workings days that FOC Product is to be distributed to the requestor and including any restrictions or limitations GENTA deems necessary or advisable.  Any such written approval shall include any requestor contact information in GENTA’s possession.  

 

5.3

Approval for distribution of FOC Product is at GENTA’s sole discretion. Upon approval by GENTA, IDIS shall distribute FOC Product to the requestor according to the terms of this Agreement and in compliance with any restrictions or limitations imposed by GENTA.  IDIS shall include FOC Product distributions as a separate item in its monthly report to GENTA set forth in clause 10.2 below.

 

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Pricing

 

6.1

IDIS shall pay GENTA the Prices for all distributed Product that is not FOC Product.  The IDIS Buy Price set forth in Schedule 1 shall remain fixed for the duration of the Agreement but may be varied by GENTA by giving IDIS not less than * days notice; save that nothing in this clause 6.1 shall give GENTA the right to vary the IDIS Buy Price  in respect of Orders of Products placed by IDIS with GENTA prior to the date of receipt of any notice of price variation.   

 

6.2

GENTA shall pay IDIS the IDIS Fee/Pack set forth in Schedule 1 for all distributed Products including FOC product. The IDIS Buy Price will be waived For any FOC Product IDIS distributes proved IDIS has obtained GENTA’s approval for such distribution in accordance with clause 5.

 

6.3

All Prices are inclusive of packaging but exclusive of any applicable value added or any other sales tax for which IDIS shall be additionally liable. GENTA may recommend in writing to IDIS a sale price for each of the Products or impose a maximum selling price at any time; provided that that price does not amount to a minimum selling price or retail price maintenance.  For the avoidance of doubt:

 

6.3.1

where GENTA has recommended a selling price to IDIS, IDIS shall be free to distribute the Products at any price it so chooses; and

6.3.2

where GENTA has set a maximum price, IDIS shall be obliged to distribute the Products at no more than that price; provided that does not amount to a minimum selling price or retail price maintenance.  GENTA hereby sets a maximum price equal to the IDIS Buy Price, as it may be varied from time to time in accordance with clause 6.1 .

 

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6.4

In the event GENTA reduces the IDIS Buy Price to an amount below the IDIS Buy Price that is in effect on the Commencement Date, IDIS will continue to receive the IDIS Fee/Pack due as of the Commencement Date as set forth in Schedule 1 .

6.5

In the event GENTA varies the IDIS Buy Price above the IDIS Buy Price that is in effect on the Commencement Date, the IDIS Fee/Pack will be adjusted in accordance with the %IDIS Fee/Pack as set forth in Schedule 1 .

6.6

Without prejudice to any other provision of this Agreement, GENTA shall advise IDIS immediately if any Price given for Products in an Order is incorrect and, in such event where the Price is incorrect GENTA shall not proceed with the Order until it has notified IDIS of that fact and received written confirmation from IDIS that the Order may proceed, at which time the Contract shall be formed.

7.

Purchase Orders

7.1

IDIS shall submit, from time to time, written purchase orders (“ Orders ”) to GENTA for the supply of the Products.  Each Order shall stipulate the Products’ names, the Products’ codes, the quantity required and the total price of the Order (excluding VAT).

7.2

The receipt by IDIS of GENTA’s written confirmation that it will accept such of an Order during the term of this Agreement shall constitute a contract (“ Contract ”), subject to the terms and conditions of this Agreement.  

7.3

Notwithstanding clause 7.2 and 23.4 , no less than * weeks prior to GENTA’s shipment date IDIS may vary, add or omit any or all of the Products in an Order by notice in writing to GENTA, provided if such change would have a material impact on GENTA’s ability to fulfill the order or cause GENTA to incur an additional cost, then IDIS shall first obtain GENTA’s prior approval, not to be unreasonably withheld or delayed.  Notwithstanding the foregoing, GENTA reserves the right to reject any Order variation or addition that it is unable fulfill and will be entitled to recover from IDIS any costs it incurs as a result of IDIS’ cancellation of an Order. GENTA shall not materially vary, add or omit any of the Products or any part of them from an Order without the express consent of IDIS. 

7.4

An update of all outstanding Orders placed by IDIS with GENTA shall be provided by GENTA as often as reasonably requested by IDIS but no more than once per week.  

8.

Delivery

8.1

Within five (5) Business Days of the receipt of an Order GENTA shall provide IDIS with an estimated date for delivery. GENTA will in any event give IDIS reasonable notice of the date of delivery.

8.2

GENTA shall use commercially reasonable endeavours to meet delivery dates and shall:

8.2.1

notify IDIS as soon as reasonably practicable of any anticipated or actual delays it experiences or anticipates experiencing in meeting an estimated delivery date;

8.2.2

provide IDIS with such details of the causes of such delays as IDIS reasonably requires; and

 

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8.2.3

update IDIS at least once a week until the causes of such delays are rectified or lapse.

8.3

IDIS may, but is not obliged to, grant such extension of time as it considers in its sole opinion is appropriate for GENTA to deliver the Products on time without breaching the Contract or this Agreement.  Subject to the foregoing and without prejudice to any other rights or remedies available to IDIS, failure to meet the estimated delivery date or any subsequently agreed date within * days or notify IDIS of * shall entitle IDIS to terminate the Contract and/or the Agreement immediately.

GENTA will not be liable for any failure or delay in providing the Products or for any failure to comply with its obligations under a Contract or this Agreement to the extent that such failure or delay is attributable to:

 

any act or omission of IDIS, its employees, agents or subcontractors which affects GENTA's ability to provide the Products;

 

the provision by IDIS of any inaccurate or incomplete data, information or documentation including without limitation in relation to any Order for the Products.

 

8.4

Unless otherwise agreed upon in writing, delivery of the Products shall take place at IDIS’ premises at Unit 22, Red Lion Road Business Park, Surbiton, Surrey KT6 7AQ (or such other premises within the United Kingdom as IDIS may notify to GENTA from time to time) and GENTA shall at its cost arrange for suitable transport to IDIS’ premises at Unit 22, Red Lion Road Business Park, Surbiton, Surrey KT6 7AQ (or such other premises within the United Kingdom as have been notified by IDIS to Genta) and arrange insurance therefore until the Products are received by IDIS.

8.5

Where the Products are to be delivered in instalments pursuant to this Agreement, without prejudice to clause 7.2 , each instalment shall constitute a separate Contract and without prejudice to any other rights or remedies available to IDIS, failure by GENTA to deliver any one or more of the instalments within * days there from in accordance with the terms and conditions of the Agreement shall entitle IDIS to treat the Contract as a whole as repudiated and terminate the Contract as a whole immediately.

8.6

GENTA shall:

8.6.1

fax to IDIS at its Fax Address a copy of the delivery note for each delivery or instalment on the day of delivery and supply a copy of the delivery note with the delivered Products;

8.6.2

inform IDIS if an Order for Products exceeds 30kg by weight when providing IDIS with the estimated date for delivery under clause 8.1 .

8.7

On delivery the Products shall be marked by IDIS in accordance with IDIS’s instructions and properly packed and secured so as to reach their destination in an undamaged condition in the ordinary course of events.

9.

Rejection

9.1

Notwithstanding any other provision of this Agreement, acceptance of Products shall not occur until IDIS or its agent or representative has been given two (2) business days to inspect the Products for compliance with the terms and conditions of this Agreement following delivery or, if later, within two (2) business days after any latent defect in any of the Products has become apparent; provided that latent defect has become apparent before the expiry of the warranty period set out in clause 14.1 .  Any deficiencies shall be reported to GENTA within two (2) business days of discovery.

 

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9.2

In the event of a breach of GENTA’s warranties in clauses 14.1 or 14.2 , or where IDIS becomes aware of a defect or latent defect pursuant to clause 9.1 , IDIS may, within one (1) day of becoming aware of such breach or defect, reject such Products by notice to GENTA specifying the nature and quantity of the defective Products.  Within thirty (30) days of receipt of such notice GENTA, shall, collect the defective Products from IDIS at GENTA’s expense (including, without limitation, costs of carriage, insurance, export/import duties) or request that IDIS destroy the defective Products at GENTA’s expense including, without limitation, costs of carriage, insurance, export/import duties), and, for Products rejected for breach of the warranties in clause 14.1 or a defect or latent defect pursuant to clause 9.1 :

9.2.1

where such Products have not yet been distributed by IDIS, replace the defective Products with Products that meet the warranties in clause 14.1 at its own expense; or

9.2.2

where such Products have been distributed by IDIS, at GENTA’s discretion deduct the relevant amount from the invoice to be raised for such distribution or credit to IDIS’s account the purchase price invoiced and any applicable value added or other sales tax (where these have been paid) for such defective Products plus costs of carriage, insurance and other fees incurred by IDIS (including, without limitation, export/import duties).

GENTA’s entire li